888 finance chief to quit as betting group’s revenues fall

Betting company 888 said its finance chief would leave the business later this year as it posted a drop in revenues.

Chief financial officer Yariv Dafna would step down at the end of March when the group published full-year results, the company said in a statement on Friday, adding that the decision was “mutual”.

Dafna, 49, has served as finance chief for two years and presided over the company’s £1.95bn purchase of rival William Hill’s operations outside the US, which included 1,500 UK betting shops and online operations in markets such as Italy and Spain.

Chief executive Itai Pazner said he played “a crucial role in the completion of our transformational combination with William Hill”. The board has begun a search for his successor.

The Gibraltar-based gambling group took on substantial debt to finance the deal, which has led to investor concerns as interest rates have risen over the past year.

Revenues fell 3 per cent to £1.85bn in the year to the end of December, despite being lifted by the Fifa World Cup in the final quarter.

Meanwhile, online revenues were 15 per cent lower year on year at £1.33bn, hampered by a tightening of UK online player safety measures and the temporary closure of 888’s Dutch operations following the loss of its local licence.

“We continue to see pressure on our UK online revenues from regulatory change including the ongoing impact of the enhanced player safety measures,” said Pazner.

“We remain focused primarily on successful integration, execution and deleveraging in order to unlock the potential from our enlarged business,” he added.

888’s gross debt stood at £1.8bn at the end of the year, with about 70 per cent of interest rates fixed for the next three years. The company has vowed to cut net debt from more than five times earnings to 3.5 times and to increase revenues to £2bn by the end of 2025.

Shares in 888 slipped by 4 per cent in early trading to just below 90p. The betting company’s stock has lost two-thirds of its value in the past year.

The company said its outlook for 2023 was unchanged, with group revenues expected to fall by low single-digit percentages.

Analysts at JPMorgan Cazenove flagged “outsized leverage and integration risks” stemming from the acquisition of William Hill’s operations outside the US and “uncertainty related to the cost of living crisis from a consumer standpoint and the UK gambling review”.